The insurance industry is facing major changes in 2025. Demographics, climate impacts, and geopolitical changes literally change the landscape in a figurative way, encouraging insurance companies to adapt. In the face of new opportunities and risks, the industry is hoping to challenge orthodox and trigger reinvention.
1. The aging population becomes the dominant industrial force.
It is predicted to push longer lifespans and fertility losses Median age worldwide Until the age of 32 in 2025 – UP from 30.9 in 2020. However, what constitutes “retirement age” has shifted to other traditional milestones such as marriage and homeownership.
There is a growing diversity in lifestyles and aspirations. As we age, insurance companies will find new opportunities to innovate and coordinate the delivery of health, life, and hybrid retirements to meet the risks of longevity and complex needs of older adults.
This innovation becomes an urgency issue for Gen X, whose oldest member turns 60 in 2025 and is less prepared than other generation cohorts. For example, in the US, 48% of Gen Xers say they did it There are no retirement plans—7 points, higher than millennials. Retirement services will become a strategic priority for the industry as they reform the way in which they serve this economically strong segment.
More retirees than the world has ever seen are challenges this year and far beyond the industry. It creates interconnected risks as healthcare providers, governments and communities struggle to expand services for seniors in a competitive labour market.
2. Property insurance creates an existential crisis.
Personal and commercial real estate accounts for around 30% of the world’s P&C premiums, and in recent years have experienced strong rate growth to drive top line growth. This rising tide has led to more claims from catastrophic events related to climate change, leading to many insurers, reinsurers and even “last resort insurance companies” leaving the segment. I did.
Southern California’s devastating start to 2025 is the latest memories that remind us of the impact of catastrophic events on people’s lives and communities. A growing awareness continues to encourage action.
Such regulations change California And Italy It’s the beginning, but there’s a need for a systematic solution that addresses pricing and resilience at the community level. We expect to see more public-private partnerships in 2025 aim to increase climate resilience in the most affected communities.
3. Instability encourages insurers to focus on what they can control.
In an uncertain geopolitical world that drives volatility into a macroeconomic environment (interest rates, supply chains, multinational commerce transactions, etc.), insurers look to what they know and have control over. The cost is known. To the extent they are controllable, that is where insurers try to improve their composite ratios.
4. AI is a new talent segment that reshapes talent strategies.
AI is currently in your business and is being used by the workforce to increase efficiency and make more effective decisions. In 2025, insurers will focus on the procurement skills needed to expand AI through the capabilities of the company in the face of the market.
Historical apprentice-based career paths are disrupted by AI. Insurance companies will adopt new approaches to talent sourcing and development. This includes looking far beyond one’s own barriers due to the full range of expertise and capabilities of low-to-high domain expertise roles.
5. Legacy Technology Pricing ends with CIO “kicking the cans”.
Airlines and CIOs who want to acquire more years from legacy technology by slowing down the modernization of resource-intensive technology will find they can run down toll roads. The industry is experiencing dramatic price increases for legacy technology (la vmware). The risks and economics of modernization will fundamentally change in 2025, forcing the industry to take action (very late).
We are optimistic.
Four years ago, we published it Revenue Landscape 2025 Report Global insurance industry revenues were projected to rise to $7.5 trillion by the end of 2025. Current forecast The industry surpasses that with global total premium volume of $7.7 trillion by the end of the year. Whether that premium growth will lead to profitable growth is our collective challenge.
We believe that the industry will embrace the challenges that will reinvent the challenges of 2025. And I look forward to being at the heart of that reinvention.
